Allianz to consider revisions to proposed Income deal; says it respects Singapore government’s position
This comes after the deal has been rejected in its current form
GERMAN insurer Allianz will consider revising the proposed transaction structure to purchase a majority stake in Singapore’s Income Insurance.
In a statement on Monday (Oct 14) night, Allianz said: “We respect the government’s position and will assess the situation with Income Insurance and NTUC Enterprise Co-operative.”
“We are convinced that partnering with Income Insurance, a company that shares Allianz’s values and commitment to customer excellence, will benefit Singapore’s customers and society,” it added.
The statement comes after the Singapore government rejected the deal and assessed that it is “not in the public interest” for the proposed transaction to proceed in its current form.
Minister Edwin Tong stated in Parliament on Monday that the Ministry of Culture, Community and Youth (MCCY) received new information regarding the proposed deal, raising concerns about Income’s ability to maintain its social mission if the deal proceeds.
While the government is not allowing the current deal to proceed, he added, it is “open to any new arrangement Income may seek, whether with Allianz or other partners”, as long as its concerns are adequately addressed.
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Separately, Income also said on Monday in a statement that it “respects the need to amend the Insurance Act to provide a clear statutory basis for its review and approval involving such applications”.
It noted that it will review and take into consideration the amendments to the Act, as well as cooperate with relevant stakeholders to decide on the next course of action.
NTUC Enterprise (NE), meanwhile, emphasised that it has “consistently acted in good faith to safeguard the interests of shareholders, policyholders and employees” of Income.
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In July, Allianz announced that it planned to acquire 51 per cent of Income at S$40.58 a share, in a deal amounting to 1.5 billion euros (S$2.1 billion). NE was to hold a 49 per cent stake post-acquisition.
MCCY had initially accepted that the rationale behind the move was to strengthen Income with a strategic partner that is a reputable player in the industry.
But after questions on the proposed transaction were raised by Members of Parliament during August’s parliamentary sitting, the Monetary Authority of Singapore provided MCCY with more details.
Tong noted that Allianz planned to implement several initiatives to enhance Income’s insurance business after the acquisition, aiming for more efficient operations with reduced capital requirements.
Allianz proposed that Income lower its existing share capital and return it to shareholders, projecting a distribution of approximately S$1.85 billion in cash within three years of completing the transaction.
MCCY was not confident that these proposals would not affect the ability of the co-op movement as a whole, or of Income itself, to carry out its social mission.
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